United Kingdom

Updated: UK offshore Round Three projects hit choppy waters

UK: In 2010 the UK embarked on the world's most ambitious offshore wind programme, awarding rights for the development of 32GW of projects.

Updated 31 July: These Round Three plans have been thrown into disarray in recent months as projects have been scaled back or cancelled.

Most recently Dong and Centrica have announced they are ending their agreement with the Crown Estate to develop the 4.2GW Irish Sea offshore zone.

Confidence in the market and the UK's ability to meet its own targets was earlier hit following the scrapping of the Atlantic Array wind farm and the cuts announced to the Dogger Bank project.

These, among other cuts, has shaved 7.37GW from plans. And despite official claims that this represents "healthy attrition", worrying statements from a number of developers with Round Three projects about their offshore ambitions reveal greater risks to the UK's pipeline.

So here is a roundup of how all of the round three projects are progressing.

Irish Sea

In its 2014 interim results, joint developer Centrica said it had reviewed the "economic viability" of the 4.2GW site and following discussions with Dong and the Crown Estate had ceased development activity.

The Crown Estate said that "challenging ground conditions make this project economically unviable with current technology".

Centrica said that it has written off £65 million ($110 million) as a result of the decision to abandon the project. Dong bought a 50% stake in the project for £40 million (EUR 48.5 million) in 2012.

The warning signs were there before this announcement. Centrica said in its preliminary 2013 results in February that it expects its "near-term investment in the UK power sector to be limited". Earlier in July it also published a report on the future of the UK energy landscape in which it said no more offshore wind development was likely to be necessary in the UK before 2030.

Atlantic Array

One of the clearest casualties of recent months is the 1.2GW Atlantic Array project in the Bristol Channel in south-west England. Developer RWE announced in November that it would scrap plans for the wind farm after deciding the project is unfeasible.

In January RWE revealed that it is planning to halve its spending on renewable projects, adding that problems with the UK government's electricity market reform were a contributing factor in cutting UK investment.

The German utility had spent five years and an estimated £13 million (EUR 15.6 million) on the Atlantic Array project, but had still not got to the stage of carrying out offshore wind measurements.

The UK's seabed landlord the Crown Estate later said the site of the axed project is unviable as an investment opportunity despite interest from developer Zero Carbon Marine in taking over RWE's plans.

Rampion

Last April, the 700MW project off England's south coast was accepted for consideration by the UK's consenting body, the Planning Inspectorate. A final decision on whether consent will be granted will be made this summer.

Due to concerns from local surfers over the effect of the project on wave heights, developer E.on cut the number of turbines by 20 to 175 and the capacity dropped from 700MW to 665MW.

Hornsea

The 4GW Hornsea wind farm was originally being developed by a joint venture between Siemens and Mainstream Renewable Power, but in 2011 Dong Energy bought into the project.

Following the initial announcement of the awarding of Round Three rights, there was surprise among those in the industry that the world's biggest developer Dong had failed to win any projects.

A first 1.2GW trench is planned to go online in 2019 and the Planning Inspectorate will complete its examination of the project in June.

Dogger Bank

Just yesterday the Forewind consortium announced that it has cut the planned capacity of its Dogger Bank offshore projects by 20% from 9GW to 7.2GW, citing investment issues.

The consortium made up of RWE, SSE, Statkraft and Statoil said that the revision has been made to focus on projects that were "likely to achieve a positive financial investment at this time".

Forewind had been planning to construct eight offshore projects in the zone, about 100 kilometres off England's east coast, but will now only pursue six.

However, there is progress being made in the earlier phases of the project. Dogger Bank Creyke Beck, comprising the first two 1.2GW projects, is about to enter the examination phase with the Planning Inspectorate. The application for Dogger Bank Teesside A&B, a further two 1.2GW projects, is on track to be submitted by the spring.

Navitus Bay

Original plans to construct a project with a capacity of 1.1GW have been whittled away to 970MW. The number of turbines was reduced from 218 to 194 under news plans revealed earlier this month. The project has met with vocal opposition from some locals over the visual impact of the project.

This latest change followed a revision in 2012, which saw the maximum number of turbines cut by a third — from 333 to 218, also moving the turbines further from shore.

In 2012, utility EDF bought into the project, joining developer Eneco New Energy to form a 50/50 joint venture.

Firth of Forth

The development of SSE and Flour's 3.9GW Firth of Fourth project has been lagging somewhat. While consenting applications have been submitted to local authorities, nothing has yet been filed with the Scottish government (as projects in Scotland must).

The first 1.1GW trench is supposed to go online in 2020, but alarm bells will be ringing following SSE's recent comments on offshore wind.

The utility said in January that it will complete a "wide-ranging review" of its offshore wind development portfolio by the end of this financial year as a result of the failure of its Galloper project to clear the first hurdle towards securing subsidies.

SSE said it expects to cut its overall capital spend in the five years from 2015.

East Anglia

The first 1.2GW phase of the 7.2GW East Anglia project has been progressing quietly. In August last year a met mast was installed at the site 45 kilometres off England's east coast.

The consent application was submitted in 2012, with a decision due in mid-2014. Construction is then expected to start in 2016, with commissioning intended for 2018.

Following this, developers Scottish Power and Vattenfall are planning to work on the East Anglia 3 and 4 projects. They are located next to each other, around 70 kilometres offshore.

However, earlier this month, Vattenfall announced that it is to cut spending on wind energy by 46%, while Iberdrola-owned ScottishPower Renewables said in December that it will not go ahead with plans to develop the 1.8GW Argyll Array offshore wind farm "in the near future".

Moray Firth

The Scottish government is set to make final decisions on the 1.5GW Moray Firth project "shortly" it was reported in January.

Local authority the Highland Council has already ruled, backing plans for the development off Scotland's north-east coast.

While the project was originally an EDPR and Sea Energy joint venture, Spanish oil giant Repsol bought out Sea Energy to form a 40/60 partnership with EDPR.

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